About Me

Monday, June 09, 2008

I attended two international conferences recently. First, the Atlas Liberty Forum in Atlanta, Georgia, USA last April, and the Pacific Rim Policy Exchange in Hong Kong this week. One article per conference below.

(1) Liberty and Choice vs. Dictation and Extortion

April 30, 2008

The Atlas Economic Research Foundation (www.atlasusa.org), a think tank based in Arlington, Virginia, USA, held its 8th Liberty Forum in Atlanta, Georgia, USA last April 25-26, 2008. Atlas gave me a modest travel grant, so I was able to go there as one of the 300+ participants from many countries.

The Liberty Forum is an annual event organized by Atlas and held in several cities in the US. Its main purpose is to gather many leaders of free market-oriented think tanks and public policy institutes, as well as some scholars and corporate leaders who believe in individual liberty and free market, enable them to meet and network with each other. There are also lectures and fora on selected topics, like this year, one session was “Promoting freedom in difficult countries” and the speakers were from Iran, Ghana, Mongolia and Venezuela.

When we formed our own think tank here in Manila, the Minimal Government Thinkers, Inc., our goal is very clear and well-defined: to advance a society of free, responsible and self-reliant individuals who demand less government, less taxes and less regulations. In short, a society that gives utmost importance to individual liberty and choice, and fights dictation in many facets of our lives, dictation and regulations that often invite extortionary behavior from those who think individuals should be guided upon, even dictated upon, on how they should conduct their lives. Like how much they can keep from their monthly income, who should be over-taxed, who should be over-subsidized, and who should administer those taxation, regulation and subsidization.

That is how I and our think tank got known to fellow free market-oriented institutes in Asia and other continents of the world, like Atlas in the US and the International Policy Network in UK.

Here in the Philippines, the attempts by the state, from local to national government units, as well as from some multilateral institutions, to forcibly collectivize many aspects of our lives, is numerous. Many of which were successful and are simply being implemented, like those high and multiple taxes and fees, trade protectionism, regulations in starting and expanding a business, and so on.

A number of those forced collectivization attempts are still being planned and need institutionalization through legislation. Among these are various price control schemes for rice, petroleum, housing, wages and medicines.

This coming May 1, the President and the top legislative leaders want two new big laws: exempting the minimum wage earners from paying personal income tax, and enactment of the “cheaper medicines” bill. The former is very rationale, it even looks cute, except that the state will also adjust upwards the taxes for those earning above minimum wage.to “compensate for revenue losses”. The second is always a populist propaganda, and two schemes the Health Department and the House of Representatives have thought of, are “generics only, no branded drugs” in physicians’ prescription, and medicine price control.

If the latter bill becomes a law, it will have 2 perverse results. One is killing choice – physicians will have no more option to choose and prescribe a certain medicine brand that they think can cure their patients given their particular illness. And two, create an extortionary environment. If the President and/or the Secretary of the Health Department are corrupt, all they have to do is go to the biggest pharmaceutical companies (generics or branded) and tell them, “hey, we will put your best-selling drugs under price control, unless you pay us.”

The price system is always the best indicator of the usefulness and availability of a certain product or service. Cheap ones are always attractive, but there are dangers that those cheap goods are of bad quality and in the case of medicines, could be unsafe and fatal. Expensive products are unattractive, but they often bring with them reliable names or brands for their manufacturers and producers, which translate to effective and safe products.

There are many factors why a product becomes expensive. Among the prominent ones are one, government taxes and fees – they are always inflationary, they always make the taxed products become more expensive. Two, the high cost of product research and development (R&D) and innovation. Copycats are always cheap because their manufacturers did not spend a single amount in product development and innovation. Three, monopolistic or oligopolistic structure of the market; ie, the fewer the sellers, the greater the tendency of the few or lone seller to abuse the market and bleed the consumers.

Note that in 2 or all of the 3 major factors mentioned above, government is involved. R&D and the cost of innovation is always very costly because of strict government health, sanitary and environmental regulations.

And so, if government intervention is costly and make things expensive, why would we seek another set of government intervention – through wage control and higher taxation of skilled laborers, those earning above the minimum wage, and medicine price control, as well as killing choice for physicians and patients?

Not only are we hoodwinked of the excesses and distortions by past government intervention and dictation. We are also hoodwinked to believe that we need more of the same abuses and dictations.

If we value our individual liberty, not their liberty to dictate to us what is supposedly good for us, then let us say NO to their attempts and dangerous legislations.

(2) Individual Liberty in the Pacific Rim

Individual liberty is a subject that is often subsumed, if ever considered at all, under general concepts like collective liberty and national sovereignty. This is wrong because if liberty and freedom are to have serious meanings, they must redound to individual liberty. The collective is composed of individuals. If individuals are considered as plain adjuncts and appendages of the collective, then only the leaders of the collective have liberty and power to selectively choose what rights and liberty the individuals can have, and what rights and liberty they cannot have.

This subject is the theme of the recent “Pacific Rim Policy Exchange” held in Hong Kong on 04-05 June 2008. It was sponsored by four free market-oriented think tanks: the U.S.-based Property Rights Alliance, the Americans for Tax Reforms, U.K.-based International Policy Network, and Hongkong-based Lion Rock Institute.

The HK meeting was the second event after the first “Pacific Rim Conference” held in Honolulu, Hawaii in May 2007. It was jointly sponsored by the same institutes, plus the US State Policy Network and the Asia Forum-Japan. I have attended both conferences, courtesy of IPN sponsorship.

The HK event was composed of six panels or subjects, three per day. These were (1) Real property rights: traditional rights, formal protection and economic growth; (2) Taming the beast: accountability, deregulation and transparency; (3) Free market health care reform: keeping healthy with a healthy market; (4) Intellectual property rights: protecting the engine of innovation; (5) Adaptation or accommodation: energy production and its consequences; and (6) Globalization: trade, regulation and international markets. And the speakers came from China, India, S. Korea, Sri Lanka, Taiwan, Hong Kong, Australia, Canada, US, UK and Peru. Other participants came from other Asian countries.

Among the panels that attracted me most were those on real property rights, intellectual property rights, and taming the beast (the State). It’s very enlightening, or perhaps depressing, to know that many governments around the world are responsible for very complicated, time-consuming and costly procedures in registering property so that many real owners of land, for instance, do not have peace of mind in saying that they indeed have full control of their lands, whether to keep it for whatever use, or sell and exchange it for money or other real properties.

Protecting intellectual property – someone’s song composition, research data and methodology, technological invention, medical innovation, and so on – is also very important. If another singer can just steal a lesser-known musician’s songs and record them and claim them as his own composition, the latter would feel robbed. If other companies, including state enterprises, can just steal the formula of an effective and best-selling pharmaceutical product because they were allowed to do so by the State in the name of “national emergencies”, the company that invented that medical product (and spent many years and several hundred million dollars in R&D) would also feel robbed. And there are many governments, upon the prodding of some activist groups, itching to do this kind of intervention and legalized stealing.

To me, such unnecessary bureaucracies in registering real or physical properties, and disrespect of the IPR of an innovator company, are examples of “government failure”. I firmly believe that protection of the citizens’ right to life, right to dignity, and right to private property, are the State’s main function. Running and operating banks, power plants, pension funds, hospitals, universities, or engaging in rice trading and broadband deals, are secondary or unnecessary State functions because these are better left to the private sector in a deregulated and competitive business environment. There is pressure on private enterprises to perform well and satisfy customers in a competitive and level playing field, while there is complacency, resulting in mediocrity, when a service is under the hands of government. This is because private enterprises depend on revenues from customers who voluntarily come to get their services, while government enterprises depend on subsidies from taxes and fees that are forcibly collected from the people.

And how could one tame the beast? A speaker from Hongkong suggested to “declaw it, one claw at a time, and blind it, if you can”. I agree with this proposal, although achieving it is very difficult because the number of claws, those various regulations, seem to be increasing, not decreasing. And very often, those regulations are not transparent; one would not know them all, including the fees, hidden requirements, and the number of days, weeks, or months to wait, until he/she gets there, in front of the concerned regulatory office. Forcing the government, both national and local, to become more transparent should be a good challenge for citizens since the total cost of (a) taxes and fees + (b) cost of compliance can be high which siphons the people’s energy and resources away from actual productive undertaking.

Aside from the six panels, the conference also featured two luncheon speakers and two dinner speakers during those two days, and all of them were articulate speakers. But the most influential of them all was Jimmy Lai, founder of Next Media communications in HK. He was also the main character in a documentary called “The Call of the Entrepreneur” produced by the Acton Institute. The man had a typical rags-to-riches story due to non-typical character of super-hard work and strict business ethics. He was emotional in the documentary when he related how difficult his and his family’s life was, both in mainland China until he was a teen-age migrant worker in HK, and how his philosophy in life changed after he read Friedrich Hayek’s “The Road to Serfdom”.

Is democracy a political condition? Many people would nod in answering this question. But Jimmy Lai says NO, because for him, democracy is a moral issue. The freedom that people enjoy in a democracy is a deep moral right, something that they will not experience in a dictatorship where the citizens are worth nothing except as adjunct and slaves of the State and State leaders, the dictators. Most importantly, Jimmy Lai says that what matters most is individual responsibility, how individuals should conduct their lives. Yes, individuals have the option whether they can be ambitious and hard-working, or be lazy and dependent on family or State subsidies. So his message to the State, “Leave us alone.” Incidentally, the recently published book by the President of the Americans for Tax Reform foundation, Mr. Grover Norquist, has the same title, “Leave us Alone”.
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